Theme: Lead Corporate India - Role of Company Secretary

37th National Convention of Company Secretaries

Overview of IFRS & opportunities for Company Secretaries Rammohan Bhave

mohanbhave@gmail.com

9004043365 & 9322249833 6th November 2009

Speakers logo

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IFRS OVERVIEW

Overview of IFRS and opportunities for Company Secretaries

Session: Best Practices in Financial / Non-Financial Disclosures

IFRS OVERVIEW & OPPRTUNITIES FOR CS PROFESSIONALS

OR SHOULD IT BESession: Practices in Financial / Non-Financial

Disclosures/ Best Non-disclosures

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COMPLIANCES / DISCLOSURES WHOSE RESPONSIBILITY?

OF COURSE

COMPANY SECRETARIES

IT’S HISTORICAL CHALLENGE & OPPORTUNITY

WITH HUGE FINANCIAL DISCLOSURES

AND MORE SO NON-FINANCIAL DISCLOSURES

SOMEBODY ASKED ME

WHAT IS NOT TO BE DISCLOSED?????

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Disclosures – dilemma world over

Creative Accounting

CorporateGovernance

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disclosures

Reopen Prior period adjustments

Huge number

Direct resp.e.g. valuer name

PROBABLE

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Creative accounting VS IFRS

IFRSIFRS

SecuritisationSecuritisation of of

debtsdebtsRevenueRevenue

recognitionrecognition

Prior periodPrior perioditemsitems

Controlled entities Controlled entities JVs & associatesJVs & associates

UnlistedUnlisted& private& private

subsidiariessubsidiaries

Historical Historical costscosts

NPANPATREATMENTSTREATMENTS

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Form vs substance:revenue recognition

Legal contract

Substantially Consumed

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FINANCIAL INSTRUMENTS

SMEs 2SMEs 2 classes onlyclasses only

Available Available For saleFor sale

Held to Held to maturitymaturity

Fair valueFair valueThru P & LThru P & L

Loans &receivables

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Why M & A do not happen thru balance-sheets?

WHY VALUATIONS ARE REQUIRED AT ALL?

BECAUSE

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OLD DEFINITION OF BALANCE-SHEET

Shee(i)t of Balances from LEDGER

IFRS takes journey to

Financial reporting (IFRS)

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DUE DILIGENCE & VALUATIONS

GETTING SUBSTITUTED BY

IFRS CONVERGED ACCOUNTS

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WHAT IS AUTHENTICATION?

WITNESSING

COMPANY BILL WILL REMOVE THIS

AFTER ONE OR TWO YEARS

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MAJOR OPPORTUNITIES

FAIR VALUE

CONSOLIDATIONS – RELATED PERSON – CONTROLLED ENTITY

HUGE DISCLOSURES – 70 TO 90% UP EUROPE EXPERIENCE, INDIA EXPECTED TO BE 2.5 TIMES UP

FINANCIAL INSTRUMENTS – 4 CATEGORIES

SUBSTANCE OVER FORM – LOANS, LEASES, USEFUL LIFE (PPE), WARRANTIES, ESOP, EXTENDED CREDIT TERMS, OFF-BALANCE-SHEET ITEMS

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COMPANY Vs ENTITY ICSI OR IGESI

INSTITUTE OF COMPANY SECRETARIES OF INDIA

INSTITUTE OF GROUP ENTITIES SECRETARIES OF INDIA

COMPANY SECRETARY

OR

GROUP ENTITIES SECRETARY

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APPROACH CHANGES

PROFIT

AS A CENTER FIGURE

TO

EQUITY WORTH

AS A CENTER FIGURE

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OLD CONCEPT

PREPARE PROFIT AND LOSS

CARRY BALANCE TO BALANCE-SHEET

BALANCE-SHEET MUST TALLY

PREPARE BALANCE-SHEET (SOFP)

CARRY DIFFERENCE TO

P & L (SOCI) – SEE IF IT TALLIES

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IFRS KNOWLEDGE not to be few people's monopoly

ICSI ALREADY SPREADING THRU

E-LEARNING

SHOULD GET INTO E-LEARNING MODE QUICKLY

ON IFRS KNOWLEDGE BANK

VC – WEBINARS ARE GREAT TOOLS

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WHOSE BABY?

SO WHO SHOULD DO THIS

OF COURSE WE ALL,

WITH OUR LEADERS

SPREAD (TOTAL COMPLIANCE) IFRS TO MASSES –

INCLUDING SMALL CITIES

SURPRISED???

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STORY OF RAJUs vs RAJUs

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LET ME SHARE

2 RAJUs did not follow corporate governance, transparency

IFRS & OTHER LAWS are tools for

Our 2 RAJUs to implement it

(President Datla RAJU& Vice-president RAJU Khanvalkar)

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SO DEAR LEADERS BOTH THE RAJUS

MY APPEAL TO PRESIDENT AND VICE-PRESIDENT

IS OUR INSTITUTE ICSI

A PUBLIC INTEREST ENTITY?

YES CERTAINLY

LET US SET EXAMPLE BY CONVERTING

INSTITUTE ACCOUNTS

TO IFRS CONVERGED ACCOUNTS

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Opportunites for company secretaries

CRO – CHIEF RISK OFFICER

CCO – CHIEF COMPLIANCE OFFICER

CDO – CHIEF DISCLOSURE OFFICER

CTO – CHIEF TRANSPARENCY OFFICER

CGO – CHIEF GOVERNANCE OFFICER

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2nd NOV JAIPUR STORY

ONE MORE LAW

SAFETY LAWS

ADDED

TO ECONOMIC LEGISLATION PAPER

WHAT IS IMPACT OF IOC MISHAP AND ROLE OF CS?

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NON-FINANCIAL DISCLOSURES

Statement of legal position – SOLP

Statement of compliance position – SOCP

Statement of Ecological position – SOEP

Statement of Governance position - SOGP

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WHAT ARE THE NUMBER OF LAWS IN INDIA?

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ANY QUESTIONS OR HAVE I CONFUSED YOU ENOUGH?

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Thank you

RAMMOHAN BHAVE

mohanbhave@gmail.com+91 9322249833+91 9322249833+91 9004043365+91 9004043365

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